Do you feel as though you are saving enough money to prepare for the future? You’re not alone if you don’t; most Americans save less than 5% of their income, despite experts recommending putting away at least 10-15%.
In order to be better with your money, here are some really easy ways to save a significant portion of your income. That’s money you can use right now to get out of debt or plan for the future.
1. Avoid lifestyle creep.
You ever notice how every time you get a raise, the money just seems to disappear? That’s because without a plan, the money just turns into extra trips to the movie theater, or a slightly nicer version of the car or cellphone you’ve already got. Your net worth never changes. That’s lifestyle creep.
Related: The 5 biggest mistakes service members make with their money »
Lifestyle creep isn’t the worst thing that can happen to you. It doesn’t make you any worse off, but you usually aren’t getting any better either. Instead, be intentional with your raises. Anticipate what you’re going to do with it before you get it. I suggest taking half of every raise and putting it toward paying off debt or saving for your goals. You can then take the remainder and increase your lifestyle spending. That way you get some immediate gratification, and some long-term improvement as well. It’s a win-win.
2. Ask for a discount.
I’m not talking about asking for a military discount when you go to Lowe’s. I’m talking about calling up your service providers and negotiating lower rates on your services. You probably got a sweet introductory rate on your cable/satellite/internet when you signed up. Then the intro rate went away and you wish you could go back.
Good news: You can go back (usually). Sometimes all it takes is a phone call. You’ll probably have to speak with a “retention specialist,” but just tell the customer service rep that you’re thinking about switching providers. I was able to get my internet bill lowered and my speed increased by doing this. I know of several people who got free NFL packages using this technique too.
The key is you have to know what your options are, don’t lie. It makes you look bad and they’ll know if you tell them you’re switching to a company that doesn’t even operate in your area. Second, and this is the most important part: You have to be polite. Don’t lose your temper or yell or swear. Just tell them that you are trying to lower your bills and you want to know if they can help you out. Be consistent, persistent and courteous and you’ll often get a better deal.
3. Be smart about your temporary duty assignments.
This one may or may not help, depending how often you go TDY. If you spend a lot of time travelling and you tend to stay off base, then it’ll help a lot. If you never go TDY or stay in field conditions when you do, then it won’t be as beneficial.
The key, as with every step on this list, is moderation. If you’re getting full-rate meals and incidentals, try to save money on breakfast and lunch. Splurge on dinner (but don’t over do it) and try not to turn all of your per diem into alcohol. Put the difference to work and make sure you claim all of your legitimate expenses so you don’t go out of pocket for something that should be reimbursable. Find someone in your unit who is knowledgeable about the Defense Travel System and get help filing your voucher. Just don’t bug them too much, once someone gets tagged as “the DTS guy” they never get left alone.
4. Plan your move carefully.
When you get ready for a permanent change of station, consider finding housing that is a little below your housing allowance. Obviously you should consider commuting distance and school districts and local crime statistics. Still, if you can make it work, just by cutting $150 per month off your rent, you could save $1800 each year. You can also try to negotiate a lower rent. Often by agreeing to sign a longer lease, you can get a lower rent. Homeowner’s love knowing that they won’t have to look for a new tenant any time soon and you won’t have to worry about rent increasing every year when a shorter lease ends.
It’s also a good time to rethink some of your purchases. Consider cancelling cable or satellite altogether and use cheaper streaming services if it works for you. You might also be able to downsize your lifestyle a little. Don’t do it just to do it, but if you’ve got rooms full of furniture that you never use, you might get away with a smaller floorplan. This also applies if you’re the guy that buys new toys every duty station. If you’re leaving Fort Lewis for Fort Rucker, you can probably get away with selling your snowboard.
5. Take advantage of your deployed entitlements.
This one is huge. When you deploy to a combat zone, you’re earning per diem, hostile fire pay, hardship duty pay, family separation pay if you have dependents, and you aren’t paying taxes while deployed. There’s two other overlooked bonuses that can help you out as well.
First, in addition to not paying taxes while deployed, you’re also reducing your taxable income when you file the following year. That means you’ll probably get a huge refund. Second, the savings deposit plan can get you a 10% return on your savings while deployed. You’ll be able to save up to $10,000 of base pay and bonuses that you earn while deployed and earn a higher interest rate than anybody else is offering.
6. Moderation is the key.
All of these steps can put a lot of money back in your pocket, but what you do with that money is up to you. Pinching pennies works for some people, but what’s the point of having money if you can’t enjoy it? Likewise, spending it can be fun in the short term, but you’ll miss out on the peace of mind that comes with being prepared for the future. You should always fall back on step one anytime you get some extra money. Spend some, save some, eliminate debt.